External factors to consider!
It’s always all about being prepared!
Will the result of the COVID-19 pandemic be a new global PCB manufacturing base, stronger focus on risk management, even better planned production lines, more automated manufacturing and humans on stake for being replaced by wires and robots in the production, less vulnerable when a pandemic strikes?
The last five months have been more out of a thriller blockbuster movie than everyday life for all of us. COVID-19, known globally by now, and words like social distancing, isolation, home office, antibac and lockdowns, are the buzzwords humming in every ear. The world as we knew it, has changed, no secret. The interesting thing is, how will it affect us in the future? Humans tend to stick to habits. Will the same happen to PCB production?
The world has reacted. Actions are taken, in order to prevent or slow down the virus from spreading like a pandemic. Will it continue and for how long? Nobody can tell, until a vaccine is available or the virus suddenly disappears, I believe we have to live with these uncertainties for some time.
It’s when times are poor, we really find our strength and innovation happens
At the moment, staying safe and keeping ourselves healthy is the priority. That is the same for an organisation. At Elmatica we have taken our precautions. Staying afloat and being able to survive the economic slowdown, brought about by the pandemic is currently the focus.
Lets fast forward and imagine, six months or a year down the road, when this pandemic is over, a vaccine is found. What will the world look like then?
We need to be ready for the future, not simply business as usual.
We need to be ready for another crisis. It’s always all about being prepared.
It’s when times are poor, we really find our strength, our core business, what we excel at and what needs improvements.
Unprecedented “pauses” like this, also provides an opportunity to look into what the industry should be doing now to prepare for future challenges. There is a Chinese saying, literally saying that, when the situation is poor, change in order to progress (穷则变，变则通.）
It is during the most critical moments of challenges, that brings about a change or innovation. That is how we progress and continue to advance and be relevant.
Production lines shifting focus
I came across an article recently about a production line producing respirators, that was shut down due to the unavailability of raw material, caused by travel bans and flight cancellation all over the world. However, innovative individuals decided to 3D print the parts locally, and managed to keep the production line running to support the medical industry fighting the virus.
The last months we have seen an increase in medical production, not only as a vital and lifesaving production in the fight against COVID-19, but also in innovation of new products. Medical production is naturally and thankfully prioritized by all industry partners, but sometimes hard times force on new and innovative products.
To see good examples of how a crisis makes innovation arise, is just to look at many of our manufacturing partners or customers, shifting their production line, turning it into a supply chain for what is needed, either masks or other protective equipment. Even if a crisis is hard to tackle, news like this, at least give back belief in the good in humans, and that the industry can work together collaboratively, side by side. Let’s hope this is one of the good things we still will prioritize and bring along also when the crisis is over.
There will be pre and post COVID-19 changes
So, what are the changes we might see after the pandemic? Here are some of my thoughts.
China has for the last decade been the world manufacturing base. Talking about printed circuits alone, China produces more than 50% of the world printed circuits output. The heavy reliance on Chinese production will gradually change.
Customers will start sourcing for manufacturers outside China, and Southeast Asian manufacturers will benefit from this gradual re-distribution of businesses.
In February when China was in lockdown, all factories were shut down. Lots of customers waiting for orders, lots of questions and stress appeared. When can the orders be received? Can the production be shifted to other manufacturing sites? When the pandemic reached Europe and the US, the whole world went into shut down. Demand started to reduce, so did the panic of not getting orders out of China.
At some point we will see more wires running in the factory than humans.
The point here is not about where the pandemic centre is. It is the concern of what if China was not able to contain the pandemic and the lockdown is indefinite. Hence when the CPVID-19 situation is over, we would be expecting that people start reviewing their supply chain and look for backup sources.
This will eventually trigger a re-distribution of supply bases, and China dominance of the printed circuits supply chain may be challenged sooner than we expect.
Printed circuit manufacturing has been a labour intensive industry for decades. Recent years we have seen a slow but steady increase of the use of automation in the factories amid an increasing labour cost. Industry 4.0 has also brought about implementation of a Smart factory. We can expect that factories will hasten the pace to convert and reinvent themselves through the use of A.I. and algorithms to plan and schedule the production, more sophisticated automation by using robots and unmanned transporters to further reduce the need of manpower. Increase in the use of automatic optical and visual inspection equipments to improve yield and early detection. At some point we will see more wires running in the factory than humans.
As the factories advance, the requirements for operators will also change, as the factories will require a higher education level of operators to control the systems running the factories, instead of operators physically carrying out manual work. The demographics of recruitment requirements for printed circuits will start to shift.
Risk management and procedures for crisis handling
All of this will eventually help reduce the intervention of humans directly in the production, improving the factories’ yield and predictability. At the same time, reducing the risk of the factories’ operations being jeopardized by the impact such as a pandemic spread. Social distancing or segregation of the workers can easily be implemented in the factories. Operators can remotely control the systems while not on-site. This allows the factory to continue operating during a crisis of such extent.
Business is expected to slow down during this period. Organizations should take the opportunity to regroup, reorganize, set new focus and implement new policies to help them get ready for a new business environment in the future. Most organizations had placed risk management and the work of the safety committee at low priority during the good times. We believe after this crisis, organizations would take a more serious approach towards risk management and setting up procedures to handle different scenarios of crisis. The point here is to always be prepared. Being prepared allows us to handle exceptional situations when it occurs.
Do you have a duo source set up?
Organizations should align their risk mitigation strategies along with their business strategies. Such as having a duo source for their supply chain, having an alternative source of supply in a different geographical region or country, setting up modular manufacturing operations that can be operated from its own. The key focus is to be prepared for the unexpected. Having an operation ready to scale up or break up into cellular operations in order to continue business when others cannot, makes the organization more resilient to handle major external challenges.
Stay prepared and in your best underwear!
One of my teachers once told me, always be in your best underwear, you never know when you will get lucky. Hence always be prepared.
We at Elmatica, a broker for printed circuits, one of our key roles is to assist our customers in their purchasing process. Next year we celebrate our 50th years in the business. We have established supply bases in every continent and continued to work on compliance with different suppliers. It is part of our strategy to continuously upgrade our system and methodology towards a digital supply chain in order to stay ahead of the business and offer the most comprehensive solutions to our customers.
No one knows what the future will look like, but being prepared and in your best underwear has never been wrong, that is the case in these unprecedented times as well.
This article was first released in our column: The PCB Norsemen in the PCB Magazine.